SK Innovation destroyed evidence in a battery suit, paid $1.8B to dodge an import ban

LG Chem (later spun off as LG Energy Solution) sued SK Innovation in 2019, alleging the rival Korean battery maker had hired away dozens of LG engineers who brought manufacturing trade secrets for lithium-ion EV batteries with them. Both companies were racing to supply battery cells for Ford's and Volkswagen's new US electric-vehicle plants, and LG argued SK's sudden ability to compete for that business rested on stolen process knowledge rather than independent development.

The case turned during discovery, when the US International Trade Commission found SK Innovation had destroyed evidence relevant to the dispute. Under US litigation rules, that kind of spoliation lets a court simply assume the missing evidence would have proven the other side's case. In February 2021 the ITC issued a default finding against SK Innovation and ordered a 10-year ban on importing the batteries, cells and components at issue into the United States — a ruling severe enough to threaten SK's US manufacturing plans outright.

Facing a ban that would have stranded a $2.6 billion battery plant under construction in Georgia, SK Innovation settled two months later rather than appeal. It agreed to pay LG Energy Solution 2 trillion won (about $1.8 billion) — split between an upfront payment and royalties over at least six years — and both companies dropped every pending suit in the US and Korea with a 10-year mutual non-assertion agreement. The settlement carved out narrow exceptions letting SK keep supplying Ford's F-150 Lightning and Volkswagen's North American EV line for a few transition years.